Earlier this year, an ifa reader poll indicated that the majority (76 per cent) of advisers plan to exit the industry once FASEA’s mandatory education standards are introduced, creating an even greater dilemma for the provision of financial advice in Australia.
Under the proposed FASEA guidance, advisers will have already met the standards requirement if they hold an approved qualification under the FASEA/FPEC register, have completed an AQF7 or FASEA approved qualification by 1 January 2024, or have completed a course that offers “at least eight units/courses” at AQF 8 level covering the fields of ethics, financial planning and technical requirements.
Fears are growing around the nation’s underinsurance problem, with many suggesting risk advisers will also exit the profession once strict education requirements are enforced.
“You don’t need a degree to sell insurance,” Wealthy & Wise executive chairman Scott Heathwood told ifa.
“It’s a monkey’s job. It’s pretty simple. You train a monkey to do it. If you pay it enough commission, give the monkey enough bananas, I’m telling you, you get a monkey to do it. It’s that simple.”
Mr Heathwood said that an “overarching mystique” has been invented about the sale of insurance and home loans in Australia that is making these products out to be more complex than they actually are.
“It’s like selling home loans. There aren’t too many bells and whistles that you can put on a home loan that makes them that different,” he said.
“Clearly in the areas where there is more complex advice being provided to someone, it might be trusts or tax or negative gearing and a combination of all of them together, the very thing they won’t recognise will be the currency required for that advice to be successful and beneficial; it’s experience that brings the currency to that advice. It’s not a university education.”
Earlier this year, Synchron director Don Trapnell issued a statement calling out the federal government for adopting an approach to financial advice that will result in “over-education” and “over-regulation”.
“We believe the government is trying to force life advisers, who are engaged in helping people to make simple, yet life-changing decisions around protecting themselves and their families, to become full service financial planners,” Mr Trapnell said.
“The pendulum has swung too far the wrong way.”
Risk advisers do not need to be across retirement strategies, “the intricacies of managed funds” or the “latest superannuation caps legislation”, he said.
Mr Trapnell called on the government to take various financial advice specialisations into account when determining standards.
Following the appointment of Scott Morrison as Prime Minister last week after a historic leadership spill within the Liberal party, some industry players are now preparing for a change of government.
The Association of Independently Owned Financial Planners (AIOFP) has grown closer to the left-leaning Finance Sector Union (FSU) in recent weeks as the political landscape shifts.
AIOFP executive director Peter Johnston wrote to the Turnbull government earlier this month outlining that there are different classifications of advice that FASEA refuses to recognise, including risk, aged care, retirement/Centrelink and ASX direct strategies.
Mr Johnston described the “FASEA fiasco” as “an unfortunate story of senseless megalomania destroying an industry, careers, jobs and families”.
Asked about what a Labor government would mean for the future of financial advice, Wealth & Wise’s Scott Heathwood told ifa that Bill Shorten would be “a disaster”.
“He has absolutely no idea and no interest in the go forward position for Australia. He’s interested in one thing only, and that is the advancement of the union cronies and that sector,” Mr Heathwood said.
“They just have absolutely no idea. It will be the politics of spite at its worst conceivable level. It will be worse than Rudd.”
Lucky you studied Machiavellianism in your fancy MBA Mr Scott Heathwood.
MBA must = Monkey Brains Arse 😆
You might want to let FASEA know how smart you are but your MBA will be worthless to them.
And as for you Bachelor of Arts, it’s not even worth a FASEA Fart 🙄
Love it, monkeys. This forum is showing up some insecurities in advisors. The whole ‘I’m not, you are’ is also an amazing comeback.
At least a monkey would have a FSG on its website, and also a monkey wouldnt be stupid enough to offer property investments in units in Chermside direct to clients either.
And dont you need an AFSL listed on your website too ?
I am deeply concerned by FASEA and their attitude that “education” is far superior to “experience”. Surely both are important.
I am also depely concerned that someone who is allegedly in the advice space cannot see the value of advice within areas they may not understand or work in.
The only monkey is this Heathwood Baboon. Stop wasting my time with your stupid comments you clown
Interesting that the first thing you see on Scott’s website are references to Properties and SMSF’s…I’d keep your head down Scott. If selling Risk can be done by a monkey it makes flogging Real Estate look like brain surgery.
Having wasted time reading this article and responding to it, I confess to feeling like a monkey myself.
[quote=Anonymous]Regardless of how stupid advisers are or how easy the job is the Government has now stepped in and over regulated. Over regulated due to a lack of self regulation. This intervention has been telegraphed for easily five years and I haven’t heard of too many riskies feeling the need to change. So Too bad so sad. Just wait till Labor gets in and it’s pay back time, just after the Royal Commission releases it’s results.
What can we do prevent further regulation and move to self regulation if we want to prevent further intervention and increased levies? Self Licensed, selecting who we are licensed through and purposely ruling out product manufacturers? Maybe I think so. It’s shocking to think some advisers are still happy that the FPA gets payments from AMP etc etc and they think this relationship is acceptable. Some people really must be monkeys.[/quote]
Thanks for your comments…Bill Shorten’s Chief of Staff.
[quote=soapbox]here bloody here…FASEA is a farce and i totally agree…we SHOULD be carving out 3 distinct areas or roles in the advice sector 1. the risk + super adviser 2. Super/risk and retirement planning Adviser and 3. All advice areas including specialist areas such as SMSF/gearing/Aged Care and listed securities. Provide each area with a clear mandate on educational req’s which ramp up the further up that scale you want to go. It means that at the lower end of the scale, simple risk and super advice can be provided simply and easily and at a corresponding price point for the public. The same further up the advice spectrum you go. Degrees and masters with designations should only be required for Planners wanting to service the high end/complex advice area. This is how Accounting has evolved and it seems (given Advice is always compared to Accounting as a profession we should aspire to) this works quite well. Common sense on all this has long since left the building – i just wish people in govt and FASEA would stop talking to us all like we’re as stupid as they clearly are. [/quote]
Regardless of how stupid advisers are or how easy the job is the Government has now stepped in and over regulated. Over regulated due to a lack of self regulation. This intervention has been telegraphed for easily five years and I haven’t heard of too many riskies feeling the need to change. So Too bad so sad. Just wait till Labor gets in and it’s pay back time, just after the Royal Commission releases it’s results.
What can we do prevent further regulation and move to self regulation if we want to prevent further intervention and increased levies? Self Licensed, selecting who we are licensed through and purposely ruling out product manufacturers? Maybe I think so. It’s shocking to think some advisers are still happy that the FPA gets payments from AMP etc etc and they think this relationship is acceptable. Some people really must be monkeys.
When a claim is paid all i hear is ” I wish i took out more ” strange that
Insurance is sold, not bought or advised. Success comes from experience and superior communication.
You are clueless
Grab the popcorn! This one is going to be fun to watch!
Well that was a well thought out and deeply considered argument. I think we know who is the monkey…
Will Scott Heathwood be putting his hand up for a preselection for the Division of Wentworth. I hear even a monkey can do it!
Ha Ha Ha….classic, I love it!
Based on this view I’m glad the bar is lifting. We can do without this thinking
FASEA has definitely over-reached and created a complicated, unnecessary mess, there is no doubt about that. They deserve to be criticised and held to account. But these comments from the Qld based adviser and Don Trapnell are wrong, unhelpful and demeaning to the good advice provided by the majority of advisers who advise on life insurance. I have great respect for Don Trapnell by the way. I think this is just a sign of the enormous amount of frustration and exasperation from the advice community regarding the farcical proposals from FASEA, which go way beyond the intent of the legislation.
“It’s like selling home loans. There aren’t too many bells and whistles that you can put on a home loan that makes them that different,” he said. Spot on..anyone who thinks different re life insurance is dreaming..
Clearly it should be made a separate license just like mortgage broking.. though perhaps that would be mean no using super and plenty of riskies will get there knickers in a knot because its the only way they can sell it..
I thought this was a terrible comment until you said you couldnt use super… Then I agreed.
Too many clients come across my desk where they have insurance premiums loaded up in their super well above the contributions going in. Fat commission and an easy sell for the previous adviser though…
Mindboggling.. simply mind-boggling. Why do we give these people airtime?
here bloody here…FASEA is a farce and i totally agree…we SHOULD be carving out 3 distinct areas or roles in the advice sector 1. the risk + super adviser 2. Super/risk and retirement planning Adviser and 3. All advice areas including specialist areas such as SMSF/gearing/Aged Care and listed securities. Provide each area with a clear mandate on educational req’s which ramp up the further up that scale you want to go. It means that at the lower end of the scale, simple risk and super advice can be provided simply and easily and at a corresponding price point for the public. The same further up the advice spectrum you go. Degrees and masters with designations should only be required for Planners wanting to service the high end/complex advice area. This is how Accounting has evolved and it seems (given Advice is always compared to Accounting as a profession we should aspire to) this works quite well. Common sense on all this has long since left the building – i just wish people in govt and FASEA would stop talking to us all like we’re as stupid as they clearly are.
Well said – best comment on page. 3 distinct areas of advice as you say. Put it in place tomorrow and problems over. Oh, but get the bad apples OUT first – the life companies know who they are and have for over a decade – just ask them! I’ve been saying a similar thing for many years. Hopefully Scott Morrison or the new minister read your comment.
Kinda agree as long as you call only the ‘complex’ level financial planners. The rest can be simply sales reps.
You are not ‘financial planning’ unless you are considering all aspects of a client’s situation, no matter how complicated. Selling insurance and rolling over super to tack on an ongoing fee isn’t financial planning, never was.
The industry is never going to be taken seriously with three tiers to cater to those not willing to do a higher level of study but still wanting to be called ‘planners’.
I agree in part although I’d argue rolling a client out of MTAA super, putting them into a well performing fund managed by an investment professional and protecting their income is indeed Financial Planning.
Its financial planning as long as all other advice areas were considered and only scoped out because further advice wasn’t required, not just because sticking to only rolling over super and selling risk is what is most commercial for the business.
Lets be honest, rolling over super and risk advice is most common because its ‘easy’ to be one size fits all and still very lucrative.
Risk advisers do not need to be across retirement strategies, “the intricacies of managed funds” or the “latest superannuation caps legislation”, he said.
Bollocks. Maybe not over the intricacies of particular investments but they absolutely need to understand retirement strategies and super caps when writing insurance within superannuation.
you are making my argument for me Anon – sure expect someone opting to be a “Risk/Super Adviser” to understand super caps and the broad mechanics of retirement planning, but how many clients are getting help to put insurance in place and getting retirement advice at the same time??? Understanding a concept is not the same as giving advice in that area and risk/super advisers would rarely do so IMO – or as i was alluding to, set clear parameters and audit to that and expect Advisers to refer where their mandate is exceeded. Not hard
Thanks Scott Heathwood for the glowing representation you have provided for the image of professional Risk Insurance advisers across Australia…extremely helpful in the current environment.
Based on the simplistic and derogatory nature of your throw away opinion, I am fairly confident I now understand who is actually the monkey.
Perhaps this is precisely the reason why lifting standards and education is required. What a dumb comment!
Risk mitigation is an important part of giving people advice. Its not an end in itself, the sooner our “industry” acknowledges this the better.
What a moronic comment from someone who either has never provided quality insurance advice or knows anything about it. Someone like this should not be allowed to practice in the financial services industry. I feel sorry for his clients as I suspect, particularly in terms of insurance, they would be PI claims looking for a place to happen.
Completely agree Ian.
It seems a monkey can advise someone to undertake an insurance contract that is full of fine print, requires medical assessments to get into place, and will save a family from poverty should the contract be called upon. Not to mention the help required at time of claim to ensure the contract is paid out in a timely fashion (the very same help lawyers charge exhorbitant fees for and for which super trustees are notoriously slow and unreliable).
As for ‘monkeys’ also being able to take care of home loans (according to Mr Heathwood), let’s see how the ‘monkeys’ go when the big banks start exercising their option to ‘sweep’ redraw accounts. (For those interested, just google “CBA to ‘sweep’ Australians’ redraw money on September 1”).
[b]Mr Heathwood’s ignorant comments are a danger to the general public and our industry. [/b]
Only one thing I can agree with Scott Heathwood on, that Shifty Shoten will be a disaster for the financial planning profession
Not as Shifty as Heathwood
Risk advisers do not need to be across retirement strategies, “the intricacies of managed funds” or the “latest superannuation caps legislation”
Really? even when recommending insurance inside super? paying using contributions and impact to contributions cap? or impact on retirement savings? transfer balance cap considerations? tax on TPD inside super?
I understand what your saying but industry funds manage to do insurance with no advice, switch super with no advice. Gearing into investment property is not even covered and double gearing and more is out there and that takes no advice. Seems to me the only people being made to have training are Financial Advisers.